California’s Fair Employment and Housing Council (“FEHC”) has finalized new regulations further limiting employers’ ability to consider criminal history when making employment decisions. The new FEHC regulations, which are scheduled to take effect on July 1, 2017, largely follow the EEOC’s 2012 Enforcement Guidance.

In addition to the new FEHC regulations and existing California law, which already limits employers’ use of criminal records when making employment decisions, municipal “Ban the Box” ordinances further restrict employers’ use of such information. We previously described Los Angeles’ new Ban the Box Ordinance.  Additionally, employers must be mindful of their obligations under the Fair Credit Reporting Act (“FCRA”) when using criminal background reports provided by third party consumer reporting agencies.

Employers should note the following highlights from the FEHC regulations:

First, the regulations expand the list of types of criminal history employers are prohibited from considering to include any non-felony conviction for possession of marijuana if the conviction is more than two years in the past.

Second, before an employer may take adverse action against an applicant based on conviction history, an employer must give the applicant notice of the disqualifying conviction and provide a reasonable opportunity to present evidence that the conviction information is factually inaccurate. This notice is only required when the criminal information is obtained by a source other than the applicant or employee (e.g. through a credit report or internally generated search).  Thus, this notice is different from that required under the FCRA, which requires certain notices only if the employer takes adverse action against an applicant based on information contained in a third-party background check report.

Third, the FEHC regulations prohibit an employer from considering criminal history in employment decisions if doing so will result in an adverse impact on individuals within a protected class (based upon race, national origin, religion, etc.).  The applicant bears the initial burden of proving that an employer’s criminal background screening policy has an adverse impact on a protected class.

Employers should review their employment applications and relevant policies to ensure compliance with not only the new FEHC regulations, but also the FCRA and applicable municipal “Ban the Box” ordinances.